Will the Footsie crash before breaking its record? Shares hover near 6,930 high but experts warn on overvalued markets

The world's top stock markets are overvalued and prices look 'vulnerable', a survey of investment managers warns.

They have sounded the alarm as London's FTSE 100 hovers tantalisingly close to its all-time high of 6,930, while on Wall Street the Dow Jones and S&P 500 continue to rack up fresh records.

Some 49 per cent of money experts surveyed by industry body CFA UK think developed world markets are overvalued - up from 39 per cent three months ago. Just 16 per cent of the 500-plus professional investors who responded view these markets as undervalued at present, against 22 per cent last time.

Getting jittery: Investing experts believe top world markets like FTSE 100 are overvalued

The poll of influential finance industry players will stoke fears that current elevated stock valuations are unsustainable, and investors are exposed to the danger of a market correction or at worst a crash.

The FTSE 100 reached a 14-year high of 6,894.90 last week, putting the UK's leading stock index within touching distance of its previous record notched up in December 1999 and the key 7,000 mark.

The CFA results, shown in detail below, reveal that the attitude towards emerging market stocks is little changed. Some 57 per cent of those surveyed regard them as undervalued now, compared with 59 per cent three months ago.

Emerging markets have taken a battering since the US Federal Reserve began scaling back its vast stimulus programme in December.

The central bank's operations were intended to support the US recovery, but they also generated plentiful cheap cash which boosted stocks and other assets around the world. The Fed's policy change means this money is now flooding back out again.

Closing in on record: FTSE 100 is within touching distance of its all-time high (Source: Yahoo! Finance)

However, the CFA notes a shift in opinion on government bonds and gold over the past quarter. The proportion of investing experts who believe these traditional safe haven assets are overvalued has dwindled - from 76 per cent to 71 per cent in the case of bonds, and from 46 per cent to 36 per cent with regards to gold.

Investors dumped gold in 2013 as the world economic outlook improved and the Fed signalled its intention to end stimulus efforts. The gold price has stablised this year at around $1,300.

Will Goodhart, chief executive of CFA UK, said investment professionals had changed their views over the past quarter on three of the five asset classes covered in its research (see below).

'Expectations that central banks may delay interest rate rises, given recent economic data and an increasingly benign inflation outlook, appear to be encouraging some investment professionals to reconsider the relative value of debt and and equity investments,' he said.

'With both the FTSE and S&P indices hovering around record highs, our data suggests that investors should perhaps be cautious about reaching for yield in developed market equities when investment professionals view that yield premium as vulnerable.'